NAM: Monday Economic Report

  • Manufacturing employment fell by 12,000 workers in December, dropping for the second time in the past three months. In 2019, manufacturers added roughly 3,800 workers per month on average, compared to the average of 22,000 manufacturing workers created each month in 2018.
  • While the manufacturing sector has steadied somewhat recently, it remains weaker than desired as firms continue to grapple with slowing global growth and trade uncertainties. Eleven of the 19 major manufacturing sectors experienced reduced hiring in December. Average hourly earnings for production and nonsupervisory workers in manufacturing rose 2.8% year-over-year.
  • In the larger economy, nonfarm payrolls increased a modest 145,000 in December. The unemployment rate remained at 3.5%, continuing to be the lowest since December 1969. At the same time, the so-called “real unemployment” rate edged down from 6.9% in November to 6.7% in December, a new record low since the series began in January 1994.
  • Meanwhile, new orders for manufactured goods fell 0.7% in November, but excluding transportation equipment, new factory orders rose 0.3%, and without defense sales, the gain registered 0.7%. Motor vehicle and parts sales increased 2.8% in November, the first increase since July and likely buoyed by the end of the auto strike. Overall, the manufacturing sector has been weaker than desired over the past 12 months, down 1.5% year-over-year and weighed down by global softness and trade uncertainties.
  • The U.S. trade deficit decreased to $43.09 billion in November, the lowest level since October 2016. Goods imports fell to a 15-month low, with real imports of petroleum in 2012 dollars at a record low since the series began in 1994 ($27.23 billion). At the same time, U.S.-manufactured goods exports fell 3.0% through the first 11 months of 2019 relative to the same time frame in 2018, highlighting weaknesses in the sector year to date.
  • Manufacturing value-added output rose 1.1%, up to $2.365 trillion in the third quarter, which was an all-time high, and led by growth in activity for durable goods, also to a new record high. Expressed in chained 2012 dollars, real value-added output rose to the highest value ever.
  • Overall, manufacturing accounted for 11.0% of real GDP in the third quarter, the same pace as in the prior quarter.